BMO Covered Call Utilities ETF - ZWU

ETF Overview

The fund has been designed to provide exposure to an equal weight portfolio of Canadian (and some American) utilities, telecoms and pipeline companies, while earning call option premiums.

The call options are written out of the money, selected based on the option's implied volatility, and are written in proportion to the securities weight. The option premium provides limited downside protection.

The underlying portfolio is rebalanced in June and reconstituted in December.

Options are rolled forward upon expiry.

Key ETF Data

Fundamentals
Category (main)	Active North American (mostly Canada) Equity Income (large cap) and Covered Calls: Utilities Sector
Category (other)	Active Equity & Covered Call - Utilities Sector
Underlying Index	No Index
ETF Structure	Active management. No index
Asset Class	Equity Income (large cap) and Options (Covered Calls) - Utilities Sector
Region	North America (mostly Canada)
Issuer	BMO
ETF Home Page	Available here

Fund Facts
Inception Date	Oct 20, 2011
Total Holdings	65
Distribution Frequency	Monthly
Leverage	None
Significant Currency Exposure	Some
Currency Hedging	Maybe *

* Manager may currency hedge at their currency

Fees
Management Fee	0.65%
Management Expense Ratio (MER)	0.72%

Trading Information
Ticker	ZWU
Exchange	TSX (Toronto Stock Exchange)
Currency	CAD

Eligibility
Eligibility *	RRSP, RRIF, RESP, TFSA, DPSP, RDSP
DRIP available **	Yes
PACC Plan available **	Unknown
SWP available **	Unknown

* Always check eligibility with your plan operator as plans and accounts can differ

** Not all brokers can facilitate these plans. Check with your broker.

Current Price, Fund Performance, Yield, NAV, Charts etc

To view the TSX or Morningstar fund page for this ETF click on the Fund Data menu tab or below:

ETF Analysis

Covered Call Strategy ETFs typically have a dual strategy: they try to replicate the returns of an index, and sell covered call options on some/all of their holdings.

The upside of selling covered call options is that the fund earns a premium for each option sold. The downside is that the upside potential of the ETF is limited due to the covered call option selling.

Before buying an ETF that uses a covered call strategy ensure you understand how such strategies work, and are comfortable with its advantages, risks and limitations.

Options are a somewhat complex financial instrument. They are relatively easy for some investors to understand, difficult for others. Since Covered Call Strategy ETFs use options, it would be wise to understand how they work before investing in any Covered Call Strategy ETFs.

Also understand the amount (if any) of Return of Capital the fund may pay out with distributions. ROC payments reduce your holding's capital.